Download store comparison – part deux

We were really pleased to hear that lots of people found our post on download stores useful, so we’ve gone away, done some more research, and doubled the number of stores covered. We’ve put together a round-up of the features, file formats, prices and percentages that 14 different stores offer, for anyone who’s looking at where to sell their music.

This is only the tip of the iceberg as far as download stores are concerned. There were over 500 legitimate stores at last count – and I’m guessing that doesn’t include all of the very specialist stores out there, but hopefully it should be a useful starting point.

Such a crowded marketplace means it can be tough for stores to survive, and Wippit, one of the first legal stores in the UK shut up shop this month, citing that it could “no longer compete in the current market climate”. More than two-thirds of all paid-for downloads are still bought from iTunes, leaving other stores to battle it out for remaining market share.

One way that stores can compete with iTunes is by having a DRM-free catalogue, which will play on an iPod, and will also (unlike an AAC file) play on every other device that people might own. 7digital recently claimed to be the first store in Europe to offer MP3s from all of the big four major labels, making it a serious challenger to Apple’s dominance in the UK.

The majority of the stores in our list offer all, or mostly all DRM-free tracks, the most high profile exception being Napster.

Another way to compete with iTunes is by offering alternative pricing plans. Most of the stores in our list are straightforward pay per download models, but eMusic and Napster both offer a choice of subscription packages.

From a label point of view, there have been some concerns over the size of revenues coming back from subscription services. Several labels have left eMusic over payment-per-track issues and Hypebot has written at length on its criticisms of the store. Hypebot calculated that a label and artist would be left with only 20 cents between them from a track sold on eMusic, which is “less than half the net payout from a similar iTunes transaction” (and iTunes is certainly not the most generous store out there).

Fans of eMusic were quick to point out, however, that the discovery aspect of the site is enough justification to be on there. The argument goes that when someone has 40 tracks that they have to download every month they’re far more likely to take a chance buying a few tracks from an artist they haven’t heard of, than they would be from a pay per download store. And then if they become a fan, they’ll spend revenue on albums and gig tickets.

We spoke to ithinkmusic a couple of blog posts ago, and they don’t think that labels are getting the revenue they deserve from _any_ stores. ithinkmusic lets you build your own download store for free and keep 95% of the sale price. Michael Cassidy believes that labels should supplement shelf space on well-known stores with their own ithinkmusic store. “You can use the technique of pushing the sales youʼre generating through your own web presence to ithinkmusic to maximise profit, instead of pushing it to someone like Beatport or iTunes, that are only going to be giving you 40/50% return on sale.” Which is also something to consider.

So, enough intro. The comparison table is available to download as a .PDF from here, and there’s a short summary for each store below. If there’s a store you would like us to include for next time, or if there’s anything else you think the chart should include, please comment or get in touch with us.

_(Btw, we’re hoping to hear back from Amazon soon, so we can add info about their MP3 store. Although it hasn’t rolled out in Europe yet, the US store has DRM-free content from all of the major labels, and flexible pricing, making it iTunes’ strongest global competitor.)_

A quick update to the info we provided on 7digital back in March – since then the site’s catalogue has rocketed to 4.5m tracks and it now has 230k registered users. 7digital now claims to be the second largest download store in the UK, and as mentioned above, it’s currently the only store in Europe to have a DRM-free catalogue from all the majors (and will probably remain that way until Amazon arrives here). Its deal with last.fm also makes 7digital very attractive; as one of the official retail partners for the streaming and music discovery site (the others being iTunes and Amazon), if you’re listening to a track on last.fm and it’s in 7digital’s catalogue, you can click to buy.

Other big 7digital news, although the store currently only sells to Europe, it’s expected to open to US and Canadian customers in Q4 2008.

We’re really pleased to be able to include more Beatport info this time. Although unfortunately, not that much more. Beatport weren’t able to tell us if they’re currently accepting new labels, or confirm if they’re putting quarterly sales targets on the labels they work with. They did make clear though, that they’re not accepting unsigned music at this time.

On to the non-controversial stuff: Beatport is the number one destination for electronic music. Over the last four years it has grown its catalogue to over 475k tracks from 67,911 artists and 8,910 labels. The catalogue covers the spectrum of electronic music, including: Breaks, Chill Out, Deep House, Drum & Bass, Electro House, Electronica, Hard Dance, Hardcore, Hip-Hop, House, Minimal, Progressive House, Psy-Trance, Tech House, Techno and Trance. Their most popular genre right now is Techno, but this changes constantly. Beatport sells MP3s, MP4s and WAVs and its price structure is a bit unusual – prices start out at $2.49/$2.99 for a promo (MP3/WAV) and then drop as the track gets older.

Beatport also has a Hip-Hop site called Beatsource.com for Hip-Hop and urban music content, and a community site, Beatportal.

The concept behind the store is to provide a sales platform for any independent label or unsigned artist, and to allow end users access to otherwise unavailable tracks. Because of this labels are not screened and their involvement with the store remains non-exclusive. Beatsdigital pride themselves on their GUI. Simple interfaces and wizards allow easy uploading, managing and monitoring of releases as well as the creation of sub-labels, biogs and albums. Labels can set their own prices and add their own artwork, release date and information. Beatsdigital are currently working on a system that will promote tracks that sell well or get strong feedback — good for pushing the quality up. As they operate an anybody-can-upload policy theyʼre transparent with the label-store split, with 60% net revenue of each track going to the label and no hosting charge. For extra promotion labels can use the Beatsdigital banner logos for their sites or embed the Beatsplayer, allowing people to stream and buy a labelʼs releases through the store.

Bleep was launched in 2004 to distribute Warp Records’ catalogue and a selection of other electronic and indie music. The store quickly gained popularity and was nominated for a Webby Award in its first year. Bleep has since won the UK Digital Music Award 2006 for ‘Best Music Store’ for its muso-pleasing selection, and was again short-listed in 2007. The store now has a hand-picked catalogue of over 100,000 tracks from labels including Planet MU, XL Recordings, Rough Trade and Domino. Key to its continuing success is the strict editorial policy, new tracks/labels must fit the store musically and be “exciting and interesting and just great music!”

Reportedly 2nd in sales only to iTunes, eMusic are the webʼs largest retailer of independent music, with no major labels onboard. They focus on customers aged 25+ and operate a subscription-based pricing model, meaning users pay a monthly fee but individual tracks then retail for very low prices (30p or less) and sometimes for free. According to some sources, “Net income is split 50-60% with the labels depending on the individual deal.” When new users sign up theyʼre treated to 50 free downloads, plus more if they refer friends. We donʼt yet know if labels get paid for these give-aways, so if you work with eMusic weʼd love to hear from you.

The big boys in digital downloads with a huge two thirds market share. Single tracks retail for a flat rate of 79p ($0.99), regardless of the trackʼs age or popularity. According to Andy Hargreaves “For each $0.99 song, Apple pays $0.60 to $0.65 to independent labels.” iTunes uses the AAC file format exclusively for all downloads, with DRM on all content except iTunes Plus tracks. Apple donʼt demand exclusivity from labels and direct applications to sell via iTunes will be screened and assessed. Labels that meet their criteria will have access to various marketing tools to promote their music such as logos, a link maker and Tell-a-Friend, a viral email marketing tool.

A quick Juno update – the store now has over 550,000 tracks and the team have introduced a couple of cool new features. The new DJ chart means anyone can build a chart from the Juno catalogue and publish it on the site, and on their own social networking pages. Big-name DJs like Mark Farina and Rui Da Silva have already created charts, and anyone can go on and make their own. A nice way to market older tracks.

The other addition is the Juno widget, pretty much standard now for most of the big download stores, you can add extra points of sale to any web page. Juno sells worldwide.

MusicGiants’ USP is that they are the only digital music company licensed in HD from all of the major labels. They claim that their sound quality is up to seven times better than other download services, but on closer inspection it seems what they mean is that their downloads are up to 7 times bigger. Whatever way you look at it, their downloads are certainly lossless WMA, so offer CD-quality sound. They have a small user base compared to other stores, but that’s no surprise since they are catering to an audiophile audience.

Because the focus of MusicGiants is on the quality of the music files, they do screen the suitability of labels to make sure the content would be suitable for their customers. Currently, they only sell in the US, and a large proportion of their content is DRM.

Napsterʼs subscription service has more than 700k subscribers in the UK, US and Germany, and boasts a catalogue of over 6 million tracks (the same size as iTunes). This makes it the largest PC based subscription service in the UK, with the largest music catalogue. Napster is one of the few stores here to use DRM, freezing out iPod users from using itʼs service. But thatʼs changing. The store made an announcement in May to say that it will be launching its full catalogue to purchase on MP3 before the end of the year. That should make it the largest DRM-free store in the UK.

Napster mainly uses aggregators to keep things efficient, but artists or labels are free to approach them directly.

Stompy is an online boutique specializing in House Music, based on the West Coast USA. The store has a really specific sound, developed over the last 16 years. The signature “Stompy Sound” encompasses funky, deep, tech, minimal, broken beat and downtempo. The store is happy to receive music directly from labels or through aggregators, but tracks have to fit in with this ‘aural vision’.

The store is really well laid out, with separate areas for DJs and clubbers; selling singles for DJs, and mixes for ‘party people’. The store sells worldwide. Revenue is 50/50, but labels get a higher cut and extra promotion if Stompy is their exclusive online store.

Trackitdown have a good amount of dance music tracks available with house and trance being the main draw for the 100,000 users. Not the cheapest tracks to buy but then Trackitdown donʼt offer anything less than 320k MP3 and WAV formats, a nod to the fact that their target market is mostly DJs and dance music enthusiasts. Trackitdown use digital watermarking in their tracks at the point of sale. This has no audible effect on the music and means Trackitdown can identify the original recipient if the file is found somewhere online it shouldnʼt be. 50% net receipts of each track sold go to the label, plus Trackitdown offer a set return fee option so labels donʼt lose out if tracks get discounted. Labels can grab a Trackitdown player to embed into their sites, including Facebook, plus they can make use of the HTML stickers; custom-made images complete with a mini music player.

Traxsource launched in late 2004 as the prototype of a legal House Music download site, something that the company claims hadn’t been done before. From 65 labels in 2004, the label has grown its catalogue to over 200k tracks, including upfront promos, the latest releases and extensive back catalogues. The store stocks ‘normal’ and high-quality MP3, and is soon to offer .WAVs. Traxsource prides itself on never having any annoying territory restrictions and it’s one price for all, in USD (good news for the UK!).

The store works with both digital distributors and directly with labels, but it’s trying to move more towards working with distributors to make things more efficient. The store doesn’t ask for exclusivity for labels, but does require exclusivity periods for releases.

In case you want to try out the store as a customer, the good people at Traxsource have given us a voucher for all FATblog readers: a coupon worth $5 off a purchase of $10 or more. Just enter this code into “Optional Code” fields during checkout. (Put the first 3 letters in the first box, and the rest in the second box) ABC EC5632ACAB8FD444 (valid until 2009)

TuneTribe started life in 2004 as a UK store dedicated to supporting both established acts and unsigned artists. Four years on, the store has expanded into Europe and the Middle East, and the brand has diversified into offering a range of digital services.

TuneTribe’s store is currently undergoing a complete redesign of its front and back end. Unfortunately any new features are secret at this stage. In terms of catalogue, TuneTribe are in the mid-league with 1.2 million tracks. The store is generous with the revenue split for labels, taking only 20% commission, and it has a widget for adding sale points to your social networking pages.

Xpressbeats is the flagship store of SE13 Digital, a download portal also running DJ Mag Digital, Gaydar Radio Jukebox, Clickgroove, and Clickproduce stores. Founded by the people behind CD Pool, it offers an eclectic mix of dance music genres, regularly featuring upfront promos and exclusives. Since the last article, Xpressbeats’ catalogue has increased to 150,000 tracks.

You can send tracks to any of SE13’s stores directly or through an aggregator, but tracks are checked for suitability with the rest of the catalogue. Xpressbeats sell worldwide (subject to licensing restrictions put in place by labels for their releases).

This is a very good article. Keep up the good work. I am doing research in this area, and was wondering if you think there is a market for music for the caribbean. I am also working on a website to be a distributor of caribbean music, so any suggestion you have will be helpful.

Thanks for the positive comments on this article. It great to know itʼs helping people. I think there’s a market for Caribbean music it encompasses lots of different styles including Reggae. It available for sale on e-tail store like Amazon which is a indication of a viable market. I would see if you can contact companies selling the music you want to distro. They may well be able to provide figure for your market research. The Association of Independent labels may also prove useful.

Good overview! Thanks. In my eyes there are some missing e.g. the next iTunes competitor Amazon.
Or the first german independent store finetunes (www.finetunes.net) which started in 2004 without DRM (focus on independent, electronic) is also worth mentioning…

No bias against masterbeat or anyone else! We plan to update the article periodically with new discoveries. So if you would like to included next time round just email us and we’ll be in touch with some info.